Introduction
Picture this: your sales staff is slogging for hours day in, day out. Your sales enablement team is covering more ground while handling the initial stages of your funnel.
But despite all this effort, your revenue reports remain disappointing. You might wonder — what gives?
The most critical missing link in your chain is a sales operations team. With a full-fledged sales ops setup, you can create data-driven action plans, target more territories, maximize lead generation, and prepare a solid groundwork for your sales team’s success.
But instituting a sales operations workflow isn't enough. You have to constantly monitor and measure your sales ops' performance to calculate the actual ROI and identify ways to boost productivity.
Learn more about why you should assess your ops framework and take a deep dive into the eight key sales operations KPIs for your business.
What are sales operations KPIs?
A sales operations team primarily takes care of all the pre-sales activities — right from strategizing and prospecting to data management and reporting.
Sales operations metrics track your team’s performance for each responsibility they’re expected to fulfill. These KPIs, or key performance indicators, offer a clear insight into the efficiency and success of your ops team against specific pre-decided goals.
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The importance of sales operations KPIs
Did you know that 58 percent of sales ops pros have issues finding data within their organization? There might be many similar lesser-known challenges hurting your operations crew — which ultimately bring down your ROI.
Redrawing your sales team structure to establish a sales ops setup isn’t enough. You have to track its effectiveness, make iterations and build its momentum through a set of relevant KPIs.
Here’s how KPIs can help your sales operations framework:
- Review progress against specific targets and identify problem areas.
- Enhance sales project management with a better-equipped ops crew.
- Stay on top of all the opportunities being created and converted.
- Empower frontline sales representatives with high-quality resources.
- Figure out potential roadblocks hampering progress.
- Get a comprehensive idea of the overall sales performance.
Consider these metrics as your guiding light to constantly optimize your process flowchart and construct the ultimate sales journey.
8 sales operations KPIs to measure and analyze
While there’s no one-size-fits-all approach to building a sales ops team, you can rely on a few key sales operations KPIs to analyze your crew’s success on every front.
Here are the eight most essential sales ops metrics to keep in mind.
1. Average sales cycle length
The sales cycle defines the average time your representatives need to convert a lead into a customer. This timeline determines how quickly or slowly your sales team can convince a prospect to make a buying decision.
Why it matters
Since shorter sales cycles = greater revenue growth, tracking the length of your sales cycle can give you a clear picture of your sales process flowchart — how streamlined it is to convert leads consistently and quickly. This reflects your sales ops team’s efficiency in creating the perfect tactical roadmap to close deals faster.
While this metric gives you an overall idea of the sales process, you can also review it alongside metrics like customer lifetime value and assess your gains in a more realistic sense.
How to calculate average sales cycle length
Total number of days between first contact and client conversion
2. Win rate
Your win rate tells you the exact percentage of leads you could convert from the entire pool. It’s a measure of your sales team’s proficiency to secure deals. One of the most critical metrics for any sales leader, your win rate highlights lucrative tactics and indicates the need for course correction.
Why it matters
Win rate is not limited to assessing your tactics and sales reps’ performance. It’s also a measure of how well your sales ops team generates and qualifies leads. This metric quickly summarizes all other sales KPIs in telling you the results your ops team has produced in a given period.
How to calculate win rate
Total number of leads closed divided by the total number of leads
3. Customer acquisition cost (CAC)
What you spend on winning a customer is another key indicator of your sales efficiency. This metric tests the cost-effectiveness of your sales process by evaluating the resources you need to close a sale.
Why it matters
Your customer acquisition costs include your ops team’s expenses to reduce the sales cycle length and increase the conversion rate. Tracking CAC can help you figure out the balance between your costs and profits.
When your expenses outweigh the earnings, your ops crew has to buckle up and identify any gaps in your program to restrategize. More importantly, if you end up with a high CAC value, most other metrics would prove superficial — since you’re ultimately paying more to earn more revenue.
How to calculate customer acquisition cost
Total sales and marketing costs, including operational and overhead expenses, divided by the total number of customers acquired
4. Lead-to-opportunity ratio
Not every lead is suited for your business. Pursuing poor quality leads can do more harm than good — leading to a prolonged sales cycle, sinking win rate and sky-high customer acquisition costs.
Why it matters
The number of leads you convert into a viable sales opportunity demonstrates your sales ops team’s ability to accurately qualify leads. It’s a measure of their effectiveness to filter out high-quality prospects through careful review and analysis. This metric also ties well with your win rate to define the quality of leads you’re pursuing.
How to calculate lead-to-opportunity ratio
Total number of leads converted into opportunities divided by total number of leads
5. Average purchase value
Calculating your average earnings from each sale is also vital for reviewing your sales productivity. When paired with your customer acquisition costs, the average purchase value will show exactly how your sales team is faring by giving an estimate of your profits per sale.
Why it matters
Your operations professionals ideally aim to raise this number by sourcing high-value leads. The average purchase value also analyzes their performance on the client servicing front. Convincing existing customers to buy more expensive products can shoot up your purchase value and highlight your sales operations' strength.
How to calculate average purchase value
Total revenue in a given period divided by the total number of purchases in that period
6. Forecast accuracy
Sales forecasting can make or break your growth curve. Talk about risk management, budgeting or resource planning — an accurate sales forecast sets the right rhythm for your business performance.
Why it matters
Your operations team is responsible for predicting the sales numbers and creating the roadmap to hit these goals. Your forecast accuracy informs you of the level of precision in your sales strategy and how close you could come to your actual targets.
This metric will allow you to identify discrepancies in your roadmap and rethink your goals. Terrible forecast accuracy can also raise red flags in your sales ops framework.
How to calculate forecast accuracy
Difference between the first and last day of forecast in the absolute percentage of cumulative sales results
7. Customer lifetime value
You can multiply your monthly revenue without signing a single new deal. Think of it this way: your revenue will automatically grow if you increase your earnings from every existing customer. This is what customer lifetime value (LTV) tells you — how much profit you can make from each customer.
Why it matters
Satisfied customers would willingly pay more for your product/service or opt for a bigger package, increasing their lifetime value for your business. Besides, a lower churn rate could also mean higher LTV. So, this metric reveals the quality of customer experiences from your ops team.
Effective lead generation also plays a crucial role in maximizing lifetime value — tying this metric to other KPIs like average purchase value and sales cycle length.
How to calculate customer lifetime value
Average amount of purchases x number of purchases in a year x average length of customer relationship
8. Weighted pipeline value
How much revenue are you expecting for the next month/quarter? The value of expected sales based on the stage they are in helps in forecasting and setting targets for the coming period.
Why it matters
The weighted pipeline value can clarify whether your ops team is doing better or worse than the last month/quarter. Your pipeline value is a direct metric for the effectiveness of your prospecting and lead generation. Stronger pipeline numbers mean your ops squad is doing well while declining trends can signal the need for a revamp.
When combined with forecast accuracy, this metric can also offer a better insight into the strength of your overall sales pipeline.
How to calculate weighted pipeline value
Probability of closing a sale x expected value of the sale
The proof is in the numbers
If your sales team is responsible for generating revenue, a robust sales operations squad can help them generate more revenue fast. This multifunctional team will look into everything — from lead generation and CRM tracking to data analytics, reporting and strategizing.
But once you’ve put an ops team in place, make it bigger and better by tracking the right metrics. Refer to this article to identify which KPIs you and your team should leverage. Turn your sales team into a revenue-generating machine by analyzing the right data at the right time.
